Analyst: 77% of iPhone 4 Are Upgraders

Some 77 percent of customers buying iPhones on iPhone 4 launch day were upgrading from earlier models, according to a survey conducted by Piper Jaffray analyst Gene Munster. In comparison, 38 percent of iPhone buyers in 2008, and 56 percent in 2009, where upgraders, according to AllThingsD.

“Apple is effectively building a recurring revenue stream, where iPhone users pay on average US$200 a year to stay current with the latest phone,” Mr. Munster said.

He added, “While its true that iPhone 4 is a more significant feature upgrade compared to the 3GS, and we expect this upgrade rate to decline next year, Apple has in three years built brand loyalty in the phone market that compels users to upgrade to the latest version and wait in line for one to six hours to pick up their iPhone.”

Along with its loyal customers, Apple seems to still be drawing new iPhone users into the fold. Based on Mr. Munster’s estimates, 16 percent of iPhone buyers this year have switched to AT&T just for the combination iPod and smartphone.

In comparison, 28 percent of iPhone buyers in 2009 were new to AT&T. That suggests, according to Mr. Munster, that it’s time for Apple to add a second U.S. iPhone carrier.

Mr. Munster is estimating that Apple will sell between 1.0 and 1.5 million iPhone 4 units, including pre-sales, during the first three days of availability. That number, while high, ultimately doesn’t matter, he said, because “Apple is tapping into the global consumer spending sweet spot, mobile, and as a result iPhone numbers are going higher in the coming years.”

And that 77% are selling their older iPhones to people who are most likely NEW users. I know I am. A friend’s son wants my iPhone 3G and is willing to pay for it. It will give them 3 iPhones for 4 people. (his poor dad is the odd man out!)

Becky Hecky3:01 PM EDT, Jun. 25th, 2010Guest

that’s definitely beneficial for you and AT&T (provided the new buyer joins AT&T).

Oh, he will. Family plan and all. Not many 16 year olds are going to risk jailbreaking a new phone when mom is paying the AT&T bill!

You don’t know 16 year olds. Back at my high school (and this was 2 years ago) I did an informal survey and found that about 75% of the students jailbroke their iDevices. I think a big motivating factor was that many 16 year olds don’t have creditcards and can’t buy apps the legit way. And 16 year olds hate being told what they can’t do, even if it’s by Steve Jobs .

You just have to swap SIM cards and you don?t need an AT&T data plan as you can use WiFi.

NOT TRUE, BEWARE. I had a used iPhone 3G on at$t without a contract for about a year and a half using WiFi, but starting last month they changed their policies and as soon as they catch you they add the $30 a year plan WITHOUT EVEN ASKING YOU. So BE VERY VERY VERY CAREFUL, and learn from my unfortunate experience.

I am confused by the high prices. How are they justified?

Think about how much the iPhone 3G costs off-contract. $599 for the cheap one. Now used, they cost about $150. That is significantly less value.